Healthcare Reform Turns Three, But Major Impacts Yet to Be Felt

(Editor’s note: The following article first appeared in the DECA Blog, a service of DECA Financial Services.) 

By Evan J. Albright

The Patient Protection and Affordable Care Act turned three years old this month and it feels as if we are waiting for the other shoe to drop.

For most Americans, the ACA will provide protections long needed, as previously uninsurable pre-existing conditions no longer prevent them from obtaining coverage, as limits are placed upon deductibles in new health plans, and as health insurance as a whole become much more available.

But while everyone will have access to health insurance, except for those with the lowest incomes, it will not become more affordable. As we pointed out last month, the ACA will reduce the pool of the uninsured but in turn exchange create a larger pool of under-insured.

For providers, having a larger pool of insured patients is a large benefit. But as we have already seen as a result of parents allowed to extend coverage to their young adults children, it offers no guarantee that providers will be paid. As one survey last year found, more than 50 percent of young adults who reported trouble paying medical bills had been covered by insurance.

Now there are indications that the new payment models under healthcare reform that reimburse providers for outcomes, rather than fee-for-service. Accountable Care Organizations, for example, are supposed to reduce healthcare costs. Healthcare provider executives will no doubt believe much of these savings will be found in the back-office. By receiving lump sums from payers–at first Medicare and Medicaid, after which private insurers will no doubt follow suit–providers will believe it will allow them to streamline back-office functions in billing, coding, and patient financial services.

Just last week a Tennessee division of St. Thomas Health, which has established one of the first accountable care organizations in the country, eliminated 38 jobs from revenue cycle operations (an executive for St. Thomas Health said creating the ACO had nothing to do with the staff reductions, however the company is investing heavily in setting up the ACO).

Healthcare reform is ostensibly about improving healthcare for Americans, but it is also equally about reducing healthcare costs. As yet we don’t know what the real impact will be, but cutting costs at the back end of the revenue cycle will put pressure on the entire financial operation of healthcare providers. Those cuts may result in extending days out of accounts receivable or worse, reducing collection volumes. No one really knows. Let’s hope that when that other shoe of healthcare reform drops, it isn’t dropping on you

Check out other great content in the DECA Blog–Bottom Line Results Matter–on insidePatientFinance.com.